Interview: HK economy sees a real recovery around the corner

Although some data of Hong Kong's economy do not look encouraging enough, the real economic recovery, boosted by tourism, will be made felt very soon by Hong Kong people, said Peter Wong, Director of Standard Chartered and Chairman of Hong Kong Association of Banks, in an interview with International Financial News in Hong Kong

CEPA helps Hong Kong economy out of depression gradually. Hong Kong economy will grow by 6 to 6.5 percent this year. Wong highlighted the driving forces buoyed sustainable bright prospect of HK economy: tourism revenue soaring, more Southeast Asian companies making HK home.

Wong saw a win-win situation where Southeast and Northeast Asian countries, as beneficiaries of the mainland's take-off, enjoyed massive trade surplus with the mainland and that in turn boosted the mainland economy. As Southeast Asian enterprises are expected to extend further into the mainland market, it is most likely that they will choose HK as their fist foothold where they can set up headquarters, have resident representatives and launch promotion campaigns for their China operation. As a result, HK will have booming industries in real estates, exhibition, air transportation and intermediary services.

A report by Hong Kong Tourism Board at the beginning of the year forecasts 205 million in-bound travelers in 2004. And this number will double to 400 million in 2007, as Wong learned from the Tourism Board.

Wong based his vision on this prospect. If a tourist spends 10,000 to 20,000 HK dollars during his stay here in Hong Kong, then 400 million travelers consume 400 billion to 800 billion HK dollars.

As their consumption will involve various sectors which can generate revenue directly to Hong Kong people, such as catering, retailing, hotels, transportation and entertainment. So HK people can pocket the windfall brought by tourism directly.

Hong Kong has a population of 6.8101 million people according to the record by the end of last year. If the 400 billion to 800 billion HK dollars is shared by the whole community, then the added average revenue per capita reaches 59,000 to 117,000 Hong Kong dollars. A survey by the Tourism Board shows that a traveler from the mainland spend more than 6,000 HK dollars on average during their trip here.

Besides money, job opportunities will be another harvest Hong Kong will gather from expansion of tourism. Jobs related to tourism have increased by 20 to 30 percent since the Individual Visit Scheme took effect. Newly created positions include jobs requiring less technical skills.

Wong thinks the recovery boosted by tourism HK is a different story compared with that in 2000. From 2000 to 2001, Hong Kong economy experienced robust growth due to exports. However, rebound took place only in foreign trade. Internet, computers and automatic instruments took the place of many positions which used to be occupied by man as the knowledge economy began. Some industries still slashed both their costs and payrolls. Under the pressure of shrinking income and increasing unemployment, HK consumers tightened their budget. This in turn made things worse. Unemployment, inflation, private bankruptcy cases, and liabilities all hit a record high in 2002 and 2003.

As the mainland relax the policy of individual trips to Hong Kong and Macao, the number of mainlanders in Hong Kong on travel will keep soaring. For the first four month of this year, 6.672 million tourists arrived in Hong Kong, a stark increase of 39.1 percent over the same period of last year. 57.4 percent of them, of 3.828 million were from the mainland, a rise as high as 56 percent.

Wong believes tens of millions of mainlanders are looking forward a HK visit freely. If the policy of individual travel is loosened further, there will be no problem of attracting travelers to Hong Kong.

As learned in the interview, Hong Kong will have several tourism attractions ready in the next few years. All of them, such as Disney Land to be open next year and the largest wet land park in Asian, have high hope for visitors from the mainland.

The members in Pan-Pearl River Delta, including 9 from the mainland and 2 special administrative regions, Hong Kong and Macao, are planning a tourism roadmap to attract more travelers from the mainland.

By People's Daily Online